ALBANY, N.Y. (AP) – An online company is losing Montel Williams as its celebrity pitchman in New York while agreeing to stop generating leads in the state for payday loans with interest rates sometimes topping 1,000 percent, regulators said Tuesday.
An investigation found Las Vegas-based Selling Source LLC, doing business as MoneyMutual, marketed illegal loans online to New York residents, and the company will pay $2.1 million in penalties, the Department of Financial Services said.
Williams, a former Marine who hosted “The Montel Williams Show” for more than a decade, signed a consent order saying he’ll stop endorsing MoneyMutual loans in New York, it said.
“Using Mr. Williams’s reputation as a trusted celebrity endorser, MoneyMutual marketed loans to struggling consumers with sky-high interest rates – sometimes in excess of 1,300 percent – that trapped New Yorkers in destructive cycles of debt,” department Superintendent Ben Lawsky said in a statement. “The company made special efforts to target the more than 55 percent of their customers who were ‘repeat clients’ – including so-called ‘Gold’ customers who took out a new loan to pay off a previous loan.”
A payday loan is a short-term advance against a borrower’s paycheck and usually carries a high interest rate. New York’s interest rate limit is 16 percent.